Conservative senators and outside groups are pushing back against a potential $500 million federal bailout of Spirit Airlines, pitting some of President Trump’s closest Republican allies against the White House on a core question of free-market principle.
The Trump administration is weighing a deal that would provide Spirit with a convertible financing facility, potentially giving the federal government up to 90% ownership of the restructured carrier, according to the Wall Street Journal. Transportation Secretary Sean Duffy and Commerce Secretary Howard Lutnick have been leading the talks and met with Trump to discuss the proposal.
Sen. Ted Cruz (R-TX) didn’t hold back. “An absolutely TERRIBLE idea,” he posted to X. “The TARP corporate bailouts were a huge mistake and the government doesn’t know a [removed] thing about running a failed budget airline.”
Sen. Tom Cotton (R-AR) echoed the skepticism. “If Spirit’s creditors or other potential investors don’t think they can run it profitably coming out of its second bankruptcy in under two years, I doubt the US Government can either,” Cotton posted Wednesday. “Not the best use of taxpayer dollars.”
Advancing American Freedom, a group aligned with former Vice President Mike Pence, released a memo calling the deal unjustifiable. “Why should taxpayers bail out one company that has been uniquely unprepared?” the group asked. “American families shouldn’t be forced to bail out Spirit and the shareholders or pay the bill to see if the federal government can run an airline.”
Trump himself signaled support for federal assistance earlier this week, saying, “Maybe the federal government should help that one out,” while citing concern over roughly 14,000 Spirit jobs. But on CNBC Wednesday, he said he’d prefer a private-sector rescue. “I’d love somebody to buy Spirit, it’s 14,000 jobs,” Trump said.
The White House stopped short of confirming a bailout is finalized, and pointed blame at the Biden administration. “Spirit Airlines would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline’s merger with JetBlue,” spokesman Kush Desai said.
The Biden DOJ sued to block the $3.8 billion JetBlue acquisition in 2022, and a federal judge upheld the block in 2024. Heritage Foundation economist Peter St. Onge told The Daily Wire the rejection was the decisive blow. “On the day it was denied, their stock fell 47%,” St. Onge said. “The low-cost carriers can’t pass anything on. They have razor-thin margins, like 2 or 3%. So they need scale to survive.”
Spirit filed for bankruptcy and has accumulated over $7 billion in debt. Rising fuel costs tied to the war in Iran have added additional pressure, with JPMorgan analysts estimating a potential $360 million increase in fuel expenses.
Union officials argued against letting the airline fail. Capt. Ryan P. Muller, chair of the Spirit Airlines pilots’ union, said, “Federal relief is not a handout. It is a loan that will allow the airline to finish the work that is already well underway.”
If completed, Spirit would join a growing list of private companies in which the federal government holds a financial stake, including Intel, MP Materials, and U.S. Steel.
